A Startup That Pays more than $1 Billion to Creators

Here’s what it takes to create the world’s largest creator's platform

A Startup That Pays more than $1 Billion to Creators

Photo by Gabriel on Unsplash

If you are an artist and create any kind of content, you would know how it feels to write your best work, present your best dance, or upload your best video. You are all pumped up to face cameras that would come the next day in your house to see the next JK Rowling, Michael Jackson, or Casey Neistat.

But none of that happens. Does it?

You put in weeks, months, hundreds of hours into that one thing that you hoped would blow up. But that was just an expectation you had, and no one cares who you are.

You get 1,000,000 views, 1,000,000 likes, and 1,000,000 fans, and you are not able to pay the bills. How would that feel, would you still be willing to put those hours to create the best art you ever created?

Most of us won’t. But Jack Conte did and here is the story of how he started Patreon.

Before Patreon

Jack Conte, after graduating from Stanford, wanted to write music. He created several albums, bands, and music videos, but only a few got the rays of the sun.

He used to make clay animations with his friends that took weeks and hundreds of hours to create just a few seconds of animation. He worked as an actor to record voices for SIMS 2, then he started his band called ‘Now we have faced’. He went on tours to cities, to bars, to play music, but no one showed up. Once in a bar of 500 people, he was playing all to himself.

Most of us would give up at such a situation, but his obsession and love for music kept him motivated. He created a band called ‘Pomplamoose’ that went viral, and one of their shows was houseful. People had to stand outside the venue to listen to their music.

This was one success of Jack Conte in a long list of failures.

Jack then started working on another project in which he had to build a replica of the control panel of Star War’s iconic Millenium falcon. For this project, he spent around 18 hours per day for around 50 days to make it perfect. His obsession to make a perfect music video costed him his savings, he maxed out his credit cards, just to see his vision come to life and fuel his obsession.

To put such an effort on a video that he knew his fans would love, but only make him few hundreds of bucks was unbearable to him.

Just think about it for a second. You have put your whole heart, soul, savings, effort, and time on something and you won’t get anything in return in terms of monetary value. Some people hate to associate art with money, but they forget that it is necessary to put food on the table.

This is how Patreon was born.

It provides creators a platform where true fans can contribute to creators on monthly subscription bases. Creators can create several packages giving exclusive content, behind the scenes, a closer look at their creative journey. Such a model allows creators to retain their creative freedom while getting a monthly salary, fans get to take a closer look at their creator's journey.


Made with Canva and Patreon brand assetsMade with Canva and Patreon brand assets

While putting out that ‘Pedals’ video on YouTube, Jack had put a small video at the end for his fans. He encouraged his fans to support him by going to a website called Patreon.com. Here his fans could contribute for each upcoming video, and they pledged to give more than $5000 in total, much better than $100 from ad revenue. This was May 7, 2013.

Let’s go back a few months.

In February 2012, while Jack was working on his ‘Pedals’ music video, he knew that it will drain his cash, and only receiving $100 at the end was just burning his heart. He knew that some of his fans would be willing to support him for each of his projects. He jots down his idea on pieces of paper and reached out to his old roommate, Sam Yam, as Jack had no technical background or programming experience.

Sam, after graduation, joined a social-mapping startup Loopt. After Loopt’s acquisition, Sam founded Adwhirl, which was acquired by AdMob. For the next few years, Sam tried out novel startup ideas and eventually landed up on OurSpot, a freelance photographer marketplace. On March 6, 2013, Sam and Conte met at a coffee shop to discuss about Patreon. As Sam has already landed on his idea startup idea, he did not pay much attention but when Jack made his pitch, Sam could not help himself and fall in love with the idea.

From that day on, Sam started coding Patreon. After many sleepless nights and making his work desk his bed, Patreon was alive. Jack Conte published his ‘Pedals’ music video and received $5000 dollars for each upcoming video. Seeing the success of Jack and the platform, many other content creators joined it.

But that was not the end. They still required funding. For the first round of funding, they set their target $700,000. After several rejections, Yam reached out to Josh Felser, who had previously rejected OurSpot. Josh Felser’s firm Freestyle Ventures, formally committed on June 12 to invest $700,000 on $5.5 million pre-money evaluation. Saar Gur, a partner in the Palo Alto office of CRV, heard about Patreon. Initially, he was not particularly interested in Patreon, as he has been evaluating various crowdfunding startups and Patreon wasn’t the standout in terms of metrics. But after seeing the behind-the-scenes video of Jack Conte’s music videos, he knew that they are dedicated and have entrepreneurial capabilities.

By August 2013, Patreon raised $2.1 million from Alexis Ohanian (co-founder of Reddit) and VC firms such as Freestyle Capital, CRV, Garry Tan, and others. In 2014, Patreon raised $15 million from 17 backers, Danny Rimmer becomes the lead investor and got a seat on the board along with Sam and Jack.

Patreon used to take 5% of the money given to creators to run its operations. Several backers have shown interest in changing the fee from 5% to 10% and double the income overnight, but that goes against the founding principles of Patreon, and Jack avoids such investors.

Currently, Patreon has 3 tiers to give options to its creators. There is a 5% lite plan, 8% pro plan, and 12% premium plan, each with more perks.

Patreon currently has 5 million monthly active patrons and 150,000+ creators. Since 2013, Patreon has paid out over $1 Billion to Patreon creators.

It is important to note that Patreon is unlike any other startup. It is not about making tons of money or getting tons of viewers, subscribers, or readers. Rather, it is just about providing creators a platform to connect with their fans more intimately and get an income directly from true fans.

“I’ve seen so many companies grow and forget where they started, and fuck over their users… I’m scared to death that will happen to Patreon.” — Jack Conte

I have learned a huge lesson from the story that there is no excuse for hard work, determination, and effort.

Finding a solution to your own problems is the best way to create something new. You will put your whole heart and soul into it, you won’t need any external motivation.

Being yourself is the best quality one should learn. ‘Fake it till you make it’ time is gone and anyone can see your true intentions.

My Documentary Style YouTube Video On The Topic

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Speech by Jack Conte

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